Overview of Pudgy Penguins tokenomics, issuance path, and ecological vision

Author: TPan Source: substack Translation: Shan Opa, Golden Finance

Last week, during the Art Basel event in Miami, the Pudgy Penguins team announced that they would be launching their own token PENGU.

I have to admit that I was a bit excited when I saw this news, even pulling my wife to watch the video on TV together (she seems to like it too...? ). This excitement is not only because I also own a Pudgy Penguin but also because since Yuga Labs launched the APE token for the Bored Ape Yacht Club in March 2022, no other top NFT project has released a similar token. Moreover, I have been following and documenting their efforts and achievements as this project gradually transforms from a pure digital avatar (PFP) and collectibles into an ecosystem with real value, including their GIF strategy, retail market expansion, and the gradual shift to becoming an airdrop hotspot.

The Unique Features of PENGU Token

1. Short Preparation Period

Despite rumors about Pudgy Penguins planning to launch a token circulating for years, the official announcement was not made until December 5, stating that PENGU will officially launch in 2024. As of the time of writing this article (December 10), the token has not been released, but it is likely to go live within the next 3 weeks.

Typically, airdrops related to assets or ecosystems have a long preparation period (months or even years) and there are strong signals indicating the launch of tokens, or airdrop eligibility is secured by announcing the snapshot date. However, PENGU has not taken this route.

This sparked a heated reaction in the NFT market:

• The floor price of Pudgy Penguins has risen from approximately 16 ETH (around $61k) to 23 ETH (around $83k).

• Lil Pudgies (its sub-series) floor price increased from about 1.7 ETH (approximately $6.5k) to 2.5 ETH (approximately $9k).

Token Positioning

Is PENGU a meme coin, a utility token, or a cultural token?

It seems that the above three roles are all present, and it may take on more roles in the future. Currently, it is described as the Pudgy Penguins official token, serving this NFT project positioned as a "cryptocurrency facade."

Although calling itself the "face of cryptocurrency" is a subjective statement, Pudgy Penguins does indeed have a solid foundation to support this claim:

• 34 billion GIF views: Almost everyone has seen the GIFs of Pudgy Penguins;

• 1.6 million Instagram followers: Cute and relatable content;

• 522,000 TikTok main account followers, and 1.1 million Pudgy Kindness account followers;

• Over 1.5 million Pudgy toys sold globally, available at retailers such as Walmart, Target, and Amazon.

For those who have not ventured into cryptocurrency, PENGU offers a new way for fans of Pudgy Penguins to establish a deeper connection with the characters, brands, and intellectual properties (IP), moving beyond just purchasing toys or interacting with content.

This aligns with my earlier point that "cryptocurrencies are better stocks." Holding the PENGU token can be seen as a new way of becoming an owner or stakeholder in the Pudgy Penguins brand, similar to the significance of purchasing company shares.

For some people, this is an investment; for others, it is a way to express their fan identity; or it could be both. Furthermore, as the brand grows, the use of the token may further expand.

Why Choose Solana?

The decision to initially issue the PENGU token on the Solana chain has caused some confusion and early criticism. Considering that Pudgy Penguins is currently based on Ethereum and its parent company The Igloo, Inc. plans to launch its own Ethereum Layer 2 blockchain Abstract, why not wait until Abstract is ready before releasing?

The following are the thoughts shared by the team in the Inner Igloo (a bi-weekly discussion for Pudgy NFT holders):

1. Expand New User Groups: The Solana ecosystem has not yet engaged with Pudgy Penguins, which is a good way to cross-promote and attract more PENGU holders;

2. Catering to Solana's Culture: Solana is known for meme coin trading, tokens like PENGU are likely to be warmly welcomed;

3. Technical Maturity: If timing permits, PENGU may launch on Abstract, but the blockchain is not ready yet, and the team believes that the token should not rush to go online. Options for bridging PENGU to Abstract (and other blockchains) will be provided in the future.

Token Economics

Pudgy Penguins presents its tokenomics in a novel and interesting way, rather than the traditional 20-page white paper and pie charts.

This cute style fully reflects the brand characteristics of Pudgy Penguins.

• Total Supply: 88,888,888,888 (8.89 billion), a tribute to the original Pudgy Penguins series of 8,888 NFTs;

• Claim period: 88 days.

Two allocation details are particularly conspicuous:

1. Other Communities:

About 24% of the tokens will be allocated to "other communities," which is comparable to the percentage allocated to the Pudgy holders community (approximately 26%).

On the surface, this seems unfair to the Pudgy community, but the distribution range explains this decision:

• Pudgy holder distribution will cover approximately 15,000 wallets;

• Other community allocations are aimed at approximately 5 million wallets.

This stands in stark contrast to the analysis of token design and distribution by 6th Man Ventures, which found that large-scale airdrops often perform worse compared to those focused on core users.

2. Positioning for mainstream consumers:

Unlike most infrastructure or DeFi tokens, PENGU is more like a cultural token or meme coin. This positioning is highly aligned with Pudgy Penguins' strategy aimed at the mainstream consumer market.

Although a specific list of "other communities" has not yet been announced (it may be released after the token launch), there are already some hints and speculations, such as the two mainstream products Phantom and Moonshot having switched to Pudgy Penguins style avatars.

Two applications released content for the Pudgy brand just 8 minutes apart on Saturday morning. Is this a coincidence? I don't think so.

If Pudgy Penguins wants to become the face of the crypto space, reaching out to the user base of Phantom and Moonshot is undoubtedly a wise move.

Another group that may become recipients of the PENGU airdrop is the community of projects that have previously provided airdrops or privileges to the Pudgy community. Over the years, dozens of projects and ecosystems have expressed goodwill towards the Pudgy community, and PENGU might be a way for Pudgy Penguins to give back to them.

In addition, during the Inner Igloo event, Luca mentioned another highlight related to token distribution: consumers who purchase Pudgy toys and register for Pudgy World by scanning the toys will also receive PENGU. This is another way to bring new audiences onto the chain.

Public Good

One distribution part that interests me the most is "public interest", which will receive 4% of the token supply.

Currently, cryptocurrencies and Web3 are still generally seen by the public as gambling, virtual currency, scams, or something that is hard to grasp. However, understanding the deeper meanings of cryptocurrencies and Web3 requires curiosity, patience, and an open attitude—there is much more to them than these negative impressions, and many positive aspects as well.

One of them is charity, and Pudgy Penguins is practicing this in its own way.

Taking the TikTok account of Pudgy Kindness as an example, it has only posted 11 videos but has already accumulated 1.1 million followers. This account focuses on different content creators and the stories behind them. For instance, the channel of creator Bill (from Fishing With "Oh Dad!") went viral three weeks ago due to an emotional video released by Pudgy Kindness, growing from 1,300 subscribers to 1.5 million.

With the introduction of tokens, projects like Pudgy Kindness will reach new heights. I look forward to seeing how it expands in the future.

Such efforts often do not receive the recognition they deserve immediately, as they do not directly increase token prices or "boost asset value." However, in the long run, they can bring goodwill and have the potential to change the public's perception of cryptocurrency, especially when such efforts come from a "cute chubby bird that can't fly" known as the face of cryptocurrency.